Shulou(Shulou.com)06/02 Report--

What do you think of reddit, which is known as the "front page of the Internet"?

Think of the endless stream of funny stalks or meme pictures on this site? Or are there all kinds of interesting gadgets that programmers often make? It seems not surprising that anything happens in this massive, inclusive forum that creates new hot spots on the Internet all the time.

But what we want to talk about today is reddit's rapid growth in advertising revenue in recent years. According to marketing research firm eMarketer, reddit's net advertising revenue reached more than $70 million in 2018, while reddit's advertising revenue is expected to reach $119 million this year. This figure is expected to reach $260 million by 2021, accounting for 0.2 per cent of the US advertising market.

Compared with Facebook and Twitter, reddit's advertising revenue is almost negligible. But reddit's advertising revenue is growing at an alarming rate, reaching 54 per cent. For a company in advertising cash has always been a difficult platform, may provide a lot of experience for reference.

330 million users only contribute less than 10 million revenue, and the traffic changes here now.

As a forum very similar to Baidu Tieba's concept, reddit has made far more achievements in terms of traffic and user volume than people can imagine. As of June this year, the number of reddit users had reached 330 million, 93% of whom were young users under the age of 50. At the same time, the average person spends 16 minutes a day on reddit, surpassing Facebook and Twitter, making it the fourth most popular site in the United States.

From this point of view, isn't this the brand's favorite high-viscosity, younger platform? But data show that in 2015, reddit's annual advertising revenue was only 8.3 million.

So, why does a platform with huge traffic not even receive advertising fees?

First of all, reddit has a very strong openness, the result of excessive freedom is the emergence of inappropriate content.

Sections can be set up according to different topics in reddit, but because the platform is not regulated, there are many sections in reddit, such as hate speech, support for piracy, extreme left, and so on, which produce a large number of "politically incorrect" comments every day. For brands, this is not a "safe" communication environment.

Secondly, the community atmosphere and mechanism of reddit are very unfriendly to the advertising content.

The content ranking mechanism of reddit is to determine the ranking of posts by the user's "top" and "step". Compared with the current more common intelligent recommendation Feed stream, this mechanism is not only quite backward, but users usually step on the ad content, and soon the ad content is squeezed under other content. In the end, it leads to a large number of reddit users and traffic, but it can not direct commercial content.

Finally, the average income of users on reddit is very low.

The New York Times has conducted a survey of the average income of users of major social networking sites, while the average income of reddit users is only 0.30 US dollars per hour, ranking lowest among Twitter, Facebook, Pinterest and Snap platforms, and even Snap users, who are famous for their young users, earn an average of 2.09 US dollars per hour. This proves that many reddit users have no income, which greatly reduces the commercial attractiveness of the brand.

What has reddit done from a chaotic and neutral counterattack to a geek community?

From this point of view, the complicated comments on the reddit platform tend to be "chaotic and neutral", with huge traffic but low net worth of users, with the majority of "primary school chickens" and "losers". Seeing this definition, I am afraid you can find many similar control products in China: Baidu Tieba, Douban Group, Jinjiang "Rabbit area" …...

So what exactly did reddit do to achieve a counterattack from 8 million to 100 million in revenue?

The first step made by reddit after deciding to "just suck money" is that the strong man broke his wrist, banned the improper content on the platform, and gave different ways to deal with it according to different degrees. For example, they joined hands with NBA to ban sections that broadcast pirated basketball matches, and shut down some sections related to extreme political and religious propositions. As for some sections that are on the verge of stepping on the red line, such as pro Trump, which has a lot of political hate speech, it is quarantined and reddit will remind users that this section contains a lot of inappropriate content before entering. At the same time, the content of this section will not appear in the searches and recommendations of other non-subscription users.

After renovating the content of the platform, reddit also issued a series of service policies for advertisers. Reddit opens a series of ad spots, such as banner listed on the top page, side ad bars and even 24-hour top posts. At the same time, in view of the younger and cutting-edge community atmosphere of reddit, reddit has also set up its own advertising service team to help advertisers optimize the content and make the advertising content more original and easier to be accepted by reddit users. At the same time, reddit is constantly showing some different features on its platform, such as the gathering of a large number of currency investors and programmers on reddit, which is very attractive to some specific types of advertisers.

Of course, reddit does not limit its income to advertising, and reddit recently opened a reward mechanism to collect commissions.

Can content cleaning and traffic alienation fill the gap between PC and mobile?

To put it simply, the "counterattack" of reddit is based on two facts: the first is the transformation from anti-commercialization to commercialization; the second is the carding and extraction of the value of traffic.

From a commercial point of view, the initial reddit must be very "anti-business". No advertising space, lack of content management mechanism, grumpy and chaotic atmosphere in the community. In this case, a community will only get farther and farther away from the business world, and form a strange logical self-consistent situation, such as non-commercialization to ensure user experience, geek feelings, freedom of speech, and so on.

In terms of traffic mechanism, reddit is actually more aggregative and fragmented than other platforms. This way of aggregating traffic according to each topic can actually provide more subdivided and vertical traffic pools than Twitter. But reddit did not show this feature, but allowed emojis, bad jokes and political speech to become its own label.

In the face of these situations, reddit chose the way of fine operation. First, the original open forums will be separated one by one, those negative plates will be isolated, and then take the initiative to recommend to advertisers sections with higher flow value. At the same time, we will continue to climb up in advertising services to provide more comprehensive services to help advertisers adapt to the community atmosphere. Finally, it reversed the sickness of several years, and began to be gradually blinded by advertisers.

In this process, we can find a problem that the means used by reddit in the process of "counterattack" still have a strong color of PC era-the same problem can actually be solved by AI algorithm. Through the AI algorithm to identify and distinguish the value of users, and then match the advertising content with it. In this way, it can not only ensure a relative inclusiveness of the platform, but also accurately find a commercial entry point.

The platforms we see today, such as Weibo and Zhihu, all do so.

Unfortunately, reddit not only uses anonymity and has limited access to users' interests and habits, but also moves so late that it didn't release the app version until 2015. As a result, it is difficult for reddit to make use of efficient AI methods, so it can only increase investment in operation.

The end result is inefficient commercialization-although reddit is expected to earn $100m this year, Twitter, which has the same volume of traffic, earned $655 million in the first quarter of this year alone. In fact, several forums we mentioned earlier, such as Douban Group, Tianya and so on, also flourished in the PC era and failed to catch up in the mobile era, and the same problems led to business inefficiency.

When the mobile Internet becomes a wormhole leading to AI, the watershed between mobile and PC becomes more and more obvious.

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